The HBOS shareholder vote on the merger with Lloyds TSB looks certain to go ahead tomorrow, after the legal challenge to Business Secretary Lord Mandelson was rejected unanimously last night by the three-man Competition Appeal Tribunal.
The HBOS shareholder vote on the merger with Lloyds TSB looks certain to go ahead tomorrow, after the legal challenge to Business Secretary Lord Mandelson was rejected unanimously last night by the three-man Competition Appeal Tribunal.
But the tribunal chairman Sir Gerald Barling QC dismissed the claim made on the government's behalf that the businessmen who had formed the Merger Action Group had not acted in the public interest. Mandelson's department had accused MAG of "spoiling tactics" and suggested that it drop the action before its costs fell on individuals.
Last night, despite the potential further cost and the time pressure, the group said it was considering whether to appeal to the Court of Session.
The tribunal had truncated its procedures to hear the appeal in 24 hours this week and deliver a verdict yesterday afternoon, to leave open at least in theory the option of a referral to the Competition Commission which could have forestalled tomorrow's vote.
Eric Daniels, chief executive of Lloyds TSB, commented last night: "The tribunal has concluded that the Secretary of State acted lawfully when arriving at his decision that the proposed acquisition of HBOS is in the public interest. The fact remains that our offer for HBOS remains the only one on the table and ensures stability and certainty for our customers, employees and other stakeholders.
"We firmly believe the deal represents a unique opportunity to create the UK's leading financial services company, while also improving confidence in the UK's financial services industry as a whole."
MAG's spokesman Malcolm Fraser, an Edinburgh architect, said: "We are pleased the chairman acknowledged in his findings that we were absolutely right to bring this case forward in the public interest, despite the best efforts of Lord Mandelson's legal team to have our case rejected."
MAG attracted backing from the First Minister and other Holyrood politicians, and over 600 business people and shareholders. Fraser said: "We did not embark lightly on this task. It has been onerous and at times highly-charged, ranged as we were against the combined might of the Department of Business, Enterprise and Regulatory Reform, HBOS and Lloyds TSB.
"We are all glad to have made the stand we did, and will continue to stand up for what we believe in. It remains our belief that allowing this proposed merger to go forward without due and proper consideration by the Competition Commission, sets a dangerous precedent."
